A bill that includes draft legislation from Canada’s Department of Finance that proposes an addition to the Income Tax Act is currently being considered by Parliament. The changes will significantly impact estate planning for Canadian couples by treating the income from a spousal trust as income of the deceased spouse, which will be taxed to the spouse instead of the trust. Concerning implications of this change were addressed during the comment period for the draft legislation by The Joint Committee on Taxation of the Canadian Bar Association and Chartered Professional Accountants of Canada, but the draft legislation was included in the bill without changes.
See Kim G. C Moody, Canada: New Draft Legislation Will Have A Great Impact On Traditional Estate Planning For Canadians, Mondaq, Nov. 11, 2014.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.
